Cape Town mayor Helen Zille has put her approval of the 2010 stadium budget on hold, following an unexpected hike in cost.
A special council meeting scheduled for Tuesday afternoon, which was to have given the green light for a R2,68-billion budget, was called off at the last minute, and postponed to Friday.
Instead, city officials were hastily trying to arrange meetings with the national Treasury to discuss ways of meeting what Zille said was a R180-million shortfall, and to renew pressure for a Treasury guarantee on any cost escalation.
On Wednesday, the city council’s member for finance, Ian Nielson, was expected to meet Deputy Finance Minister Jabu Moleketi in Cape Town in a bid to resolve the matter.
The city had been hoping to formally award the stadium tender on Wednesday to the Murray and Roberts/WBHO consortium.
Zille told a media briefing that if the city did not get the assurances it was looking for in the next two days, ”then we’ve got a serious problem”.
She said the council could have approved the amount on Tuesday, and only then looked at creative ways of funding it.
”But that’s too much risk,” she said.
”I cannot put the city at that level of risk, especially in a context where all other spheres of government are saying ‘that’s as much as we’re putting in, full stop …’
”We’ve got to make absolutely sure that people understand that there is a ceiling to the amount of money that this city can put in without seriously compromising our service delivery mandate.”
The city had already allocated R400-million to the project, plus a R100-million contingency fund.
It managed earlier this month, in discussions with the consortium, to dramatically reduce the cost of the 68 000 seater stadium from the original R3,7-billion, partly by structural changes. These included making the stadium smaller by about 4m on the radius and 2m lower.
Nielson said on Tuesday that in those discussions, many of the savings were based on estimates.
The professional team had then revised its calculations and shown their was an overrun of R180-million, he said.
One solution would be a change in the way the Treasury paid the city the R1,93-billion it has earmarked for the project, so that instead of the current three-months-in-advance agreement, the city was paid ”a big chunk” it could bank and earn interest on.
Earlier it was reported that the national government had committed R1,93-billion to the project, the provincial government R112-million and the city R400-million — an amount Zille says ratepayers would not be asked to top up. – Sapa